Biden signs into law infrastructure bill that pauses controversial rebate rule

Joe Biden portrait
President Joe Biden signed into law a roughly $1 trillion infrastructure package that would pause implementation of a controversial rebate rule. (The White House, Public domain, via Wikimedia Commons)

President Joe Biden signed into law Monday a roughly $1 trillion infrastructure bill that pauses a controversial rebate rule from going into effect.

The law aims to use funding from the cuts and other sources to make major investments in roads, bridges and other transportation items. The massive legislation also includes provisions aimed at increasing domestic manufacturing of healthcare equipment.

The bill primarily focuses on infrastructure spending on transportation and other priorities. But it does include a requirement that any long-term federal contracts for personal protective equipment (PPE) must come from domestic sources.

The provision reflects a major problem hospitals and health systems faced at the onset of the pandemic when foreign supply chains caused massive delays in shipping out PPE to desperate hospitals.

RELATED: Congress to add delay to Part D rebate rule to help pay for infrastructure package

The law also would install a moratorium on implementing a controversial rule that eliminates the safe harbor for Part D drug rebates, leaving the rebates open to prosecution under federal anti-kickback laws. The controversial Trump-era rule would replace the safe harbor with a new discount at the point of sale.

But the rebate rule has major opponents in the insurance and pharmacy benefit manager industries that say the rule will raise premiums on seniors and not defray costs.

Another $1.75 trillion infrastructure bill being considered now before Congress would completely repeal the rebate rule.

The Biden administration has delayed the rebate rule’s implementation period several times, with the latest extension for implementation until 2023.

The infrastructure law also requires manufacturers of certain single-dose package drugs payable under Part B to give refunds for any discarded amounts of such drugs.